Opinion | Digital Domain's new Hong Kong owner, Wanda's Imax affair
Digital Domain is headed for turbulence with its takeover by a new Chinese parent, while Wanda may be moving too fast with a major expansion of its Imax tie-up.

A couple of news bits are highlighting China's rapidly blossoming love affair with Hollywood, and also hinting at the turbulence we're likely to see in the next couple of years as Chinese firms invest too much as they become smitten with show business. One of those deals has US digital effects house Digital Domain being taken over by a new Chinese owner less than a year after it was purchased out of bankruptcy by a Beijing-based film producer. The other has leading theatre chain owner Wanda Group significantly boosting its ties with Canada's Imax (Toronto: IMX), as it invests heavily in Imax's big-screen technology.
Both of these deals shine a spotlight on the building bubble in China's film and related theatre businesses, which are seeing massive new investment as China and Hollywood rapidly expand their ties. Much of that new love affair is understandable, since China's box office is growing rapidly and is now the world's second largest behind only the US. But as with many things in China, this sudden rush of companies into a hot new industry is likely to result in a bubble due to excessive new investment.
From Digital Domain, let's take a look at the latest announcement from Wanda, a leading Chinese real estate group that is quickly developing its own taste for Hollywood. Wanda made headlines last year with its purchase of AMC Entertainment, the second largest US theatre chain operator. As part of that deal, Wanda, which is also one of China's top theatre operators, announced it would make major investment to upgrade both its China and US theatre operations.